Guide to Execution Management System (EMS) [capabilities & vendors]

In this article, we will explore the concept of an Execution Management System (EMS) and its significance for the buy-side finance industry. We will delve into its features, benefits, and the key distinctions between an EMS and other related systems. By the end of this article, it’s our goal that you will have a clear understanding of what an EMS is and how it can enhance trading operations.

Traders and their investment firms can greatly benefit from leveraging an EMS to streamline their trading activities, access real-time market data, and achieve faster and more efficient trade execution.

Read on to find out what Execution Management Software is and discover how it can aid your trading requirements.

What is an Execution Management System (EMS)?

An Execution Management System is essentially trading software for the buy side. It's a software platform that provides traders with real-time market data, advanced execution options, liquidity management tools, and transaction cost analysis. It enables traders to execute trades quickly and efficiently, optimising their trading strategies and improving overall execution quality while minimising trading costs.  

Integration with Order Management Systems (OMS) allows for seamless workflow and improved operational efficiency.


EMSs are sometimes multi asset, but most commonly they tend to focus on one or a couple of asset classes such as equity, fixed income, etc. This is in part because trading capabilities differ vastly between instrument types. For example, a fixed-income trading system requires completely different features and integrations than an equity EMS. Sometimes Execution Management System Providers will have just one EMS, and sometimes several for different asset classes, and sometimes one multi-asset EMS.

Features of Execution Management Systems

An Execution Management System (EMS) is a software platform designed to execute trades quickly and efficiently. It provides traders with real-time market data, access to various trading venues, and advanced execution options. Here are some key features of an EMS:

Real-time Market Data

Execution Management Software offers traders access to in-depth, real-time market data. This includes information on prices, volumes, and liquidity across different trading venues. Having up-to-date market data allows traders to make informed decisions and react quickly to market movements.

Execution Options

EMSs provide traders with a range of execution options beyond simple market or limit orders. They offer advanced order types such as conditional orders, list trading, and multi-leg orders. These options help traders optimise their trade executions and improve their overall trading strategies.

Liquidity Management

An important feature of a Trade Execution System is its ability to centralise access to liquidity. Traders can view available liquidity across multiple trading venues and make informed decisions on where to execute trades. EMS also support slicing orders into smaller trade instructions across different venues to achieve better execution outcomes.

Transaction Cost Analysis (TCA)

EMS sometimes include tools for analysing the costs associated with trade execution. TCA functionality allows traders to evaluate the effectiveness of their trades, identify areas for improvement, and measure execution quality. This helps traders optimise their trading strategies and manage costs.

Expanded capabilities create an Order Execution Management Systems (OEMS)

EMSs can be integrated with Order Management Systems (OMS) to provide seamless workflows in the front and middle office. If the capabilities are joined in one system, it is called an Order Execution Management System (OEMS), or sometimes an OMS Trading System.

Integration allows for efficient order routing, trade allocation, and compliance checks. It enables traders to access relevant order information and see orders earlier directly in the OMS before they are sent to the EMS.

The best order management systems for trading are cross-asset and support the use of any EMS, even if the OMS itself has Execution functionality built into it. 

Other Systems Commonly Confused with Execution Management Systems

Various buy side trading technologies sometimes overlap and it can be challenging to distinguish between different systems and their specific roles. This confusion can arise because Execution Management System vendors, sometimes also offer other related systems for the Front Office, such as Order Management Systems (OMS) and Portfolio Management Systems (PMS). To clarify these distinctions, let's delve into each of these concepts. First, let’s illustrate the concepts:

Buy-side system examples, from best of breed to front to back

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Order Management System (OMS)

An OMS serves as the central nervous system of investment workflows. It covers functionalities like rebalancing, order routing, and real-time portfolio analytics. OMSs primarily cater to front- and middle-office functions, enabling investment managers to streamline daily investment workflows, automate allocations, ensure compliance, and enhance order planning. While OMSs may offer execution capabilities, they are primarily used by portfolio managers to manage portfolios and generate orders based on their investment strategies.

Portfolio Management System (PMS)

Portfolio Management Systems can mean two things for a buy-side firm. For a hedge fund, a PMS enable tracking and management of positions, NAV, share classes and more. These systems offer features like shadow accounting, corporate action processing, fee management and sometimes general ledger.

For an asset manager on the other hand, a PMS is a Front Office tool used by portfolio managers to construct their portfolios. Functionality can be broad including integrated optimisation models, fundamental data and more.

While OMSs, EMSs, and PMSs may have overlapping functionalities, they serve distinct roles and cater to different user groups within buy-side institutions. Understanding these differences is crucial when selecting the right system for your firm's specific needs. Read more in our blog comparing OMS and PMS.

Limina IMS and IBOR system modules

In the next section, we will explore the benefits EMS Trading Platforms offer and how they can enhance trading activities and improve overall efficiency.

The Benefits of Execution Management Systems

Buy side trading software offer several benefits that make them essential tools for traders in the financial services industry. Here are some key advantages of using an EMS:

Speed and Efficiency

Speed is crucial in today's fast-paced financial markets. EMS Trading platforms provide traders with real-time market data and quick access to various trading venues. This allows them to make informed decisions and execute trades rapidly, helping traders achieve best execution and minimise slippage.

Better Execution through Market Insights

EMS platforms provide traders with in-depth market insights, including real-time data, charts, and transaction cost analysis (TCA). These tools help traders analyse market trends, monitor trade performance, and assess the impact of their trades on transaction costs.

Customisation and Flexibility

Modern execution platforms are highly configurable and can be tailored to meet the specific needs of traders and their trading strategies. Traders can customise their trading screens, set up personalised workflows, and define their preferred trading parameters.

Compliance and Investment Risk Software

EMS platforms often include trading restriction rule checks and monitoring, that help traders adhere to regulatory requirements and internal trading guidelines. Real-time compliance checks and pre-trade risk controls help mitigate the risk of trading errors and ensure regulatory compliance.

Key Takeaways

Execution Management Systems provide traders with speed, efficiency, access to liquidity, advanced order types, market insights, integration with OMS (or jointly as Order Execution Management Software), customisation options, and compliance support. These benefits enable traders to execute trades effectively, make informed decisions, and navigate the complexities of the financial markets.

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